The Spanish bonds most surely will hit levels that could exceed seven percent very soon. Greece could still keep the euro, knowing all good austerity measures will not be able to last into the foreseeable future. Cyprus keeps getting dragged down under enormous amounts of debt now equal to that of Iceland, which is another foreseen hot spot.
One important thing to remember is the underlying factors that started the global crisis in the first place. These factors amounted to excessive amounts of money and debt within the global economy. Simply put, excessive money will force up asset prices. On the other hand, the destruction of debt or de-leveraging will force money out of the monetary system all the while taking asset prices down with it. The bailouts over the past three years are coming apart because they were supported by artificial prices, to begin with.
The matter for investors now is to choose where their money should go. It can be a tricky decision when certain asset classes such as stocks or real estate keep losing value. Bonds seem to be more favorable to investors lately. But with all that has happened within Greece and Spain, bonds truly are one of the worst investment classes now to get into for future asset protection.
Now many investors seem to be channeling themselves into smaller asset classes notably gold and silver. The best part of this investment is that this is true money. These precious metals offer no counter-party risk. No central bank can print these metals for monetary manipulation to devalue their true worth. They also double as an insurance policy. Offering protection to the investor from monetary inflation which is continuously being created by the central bankers the world over.
To time the market moves within the gold and silver markets are difficult. For those wishing to invest in precious metals, it is advisable to invest in physical metals only. Stay away from all precious metal paper assets. You must plan to hold these investments for the long term. Buy on price dips and at timely intervals such as monthly if possible. This allows you to dollar cost average the price over the entire investment period.
Many experts do agree with analysts who have a keen sense of detecting precious metal market bottoms. When bottoms do occur, you can bet the bottoms inside stocks will be much lower. In an up-turn market silver almost always performs better than gold. However, it performs worse when the market reverses itself. This could be due to higher price manipulation within a smaller market. For whatever reason, it’s safe to say that one can have confidence when gold’s price rises, but silver will still outperform.